Justin Sun, the billionaire founder of Tron cryptocurrency, filed a federal lawsuit Tuesday against World Liberty Financial, the digital currency company co-founded by Donald Trump and his sons, claiming the venture illegally froze his token holdings and installed secret tools to block their sale.
Sun, who invested $45 million into World Liberty and received an additional 1 billion tokens as an adviser, alleges the company embedded what he calls a "backdoor blacklisting function" into the blockchain contracts governing the WLFI tokens. According to the lawsuit filed in California federal court, World Liberty used this mechanism to prevent him from trading his tokens after they became tradeable in September 2025, even while they sat in his digital wallet.
The company also allegedly threatened to "burn" or permanently destroy Sun's holdings outright. His portfolio of 4 billion WLFI tokens is currently valued at approximately $320 million, making him one of World Liberty's largest stakeholders.
The relationship between Sun and the Trump-backed venture has deteriorated sharply since the fall. In September, Sun first publicly claimed his tokens had been frozen. Weeks later, he posted on social media that World Liberty had secretly embedded the freezing mechanism, giving the company what he described as "unilateral power" to confiscate token holders' assets without justification or recourse.
World Liberty responded with a taunting post of its own: "We have the contracts. We have the evidence. We have the truth. See you in court pal."
Sun said in a Wednesday post that he had attempted to resolve the dispute in good faith but World Liberty's leadership refused to unfreeze his tokens or restore his rights as a holder. He also stated he "strongly opposes" a new governance measure the company proposed last week that would restrict early investors holding combined 17 billion tokens from trading until 2030, a year after Trump's presidency is slated to end. Sun claims he cannot vote on the proposal because World Liberty froze his early investor tokens.
World Liberty declined to comment on the lawsuit itself but disputed Sun's adviser status. A company spokesperson said Sun "is not an advisor at World Liberty Financial, and he has never held an operational role in the company." The White House did not respond to a request for comment.
The lawsuit arrives as World Liberty faces mounting criticism from its investor base over transparency gaps, centralized control, and unresponsiveness to community concerns. The Trump family has already extracted more than $1 billion from the venture, with the company's bylaws routing 75 percent of WLFI token sale revenue directly to Trump interests.
WLFI tokens differ from traditional company shares. Holders gain limited governance participation but receive no ownership stake in the company and are not entitled to dividends. This structure was a central point of contention in Sun's case, since it clouds questions about whether token restrictions constitute property rights violations.
The clash represents a striking reversal for Sun, who the lawsuit notes has long been a vocal Trump supporter and has also invested heavily in Trump's meme coin venture. In March, the Securities and Exchange Commission settled a separate 2023 case against Sun for $10 million over allegations of fraud and unregistered securities sales, though Sun admitted no wrongdoing.
Author James Rodriguez: "When the biggest investor in a Trump crypto venture ends up suing for illegal lockdowns, you know the experiment in self-dealing is hitting real legal trouble."
Comments